Stamps and registration
Taking forward my Government’s initiative on tax reforms, I propose to rationalise
stamp duty and registration charges. The Tax Reforms Commission had recommended and I
quote, “The Commission recommends that, to remove discriminatory treatment of equals,
in the interest of horizontal equity, the incidence of all levies on conveyance (including
surcharge, additional stamp duty and registration fee) should be limited to 9% of the
market value in all areas without differentiation”.
Sir, Based on this recommendation, I propose to reduce the stamp duty from 10 per cent to
8 per cent on conveyances, for property situated within the limits of Bangalore
Metropolitan Regional Development Authority, and from 9 per cent to 8 per cent for
property situated in city corporations, city municipalities, town municipal councils and
town panchayaths outside the limits of BMRDA.
I also propose to bring down the Registration fee to 1 per cent from 2 per cent. I propose
to levy surcharge of 2 per cent and 3 per cent on the stamp duty instead of the existing
additional duty on behalf of the local bodies, as prevailing in the Section 99, of the
Karnataka Municipalities Act, 1964, even in the areas of Municipal Corporations and Taluk
Panchayats. The relevant Acts will be amended accordingly.
With effect from April 1, 2003, the use of stamp papers and stamps including judicial
stamps will be discontinued. With this, the process of elimination of fake stamp papers
and stamps will be completed. I propose to exempt levy of court fee stamp upto Rs 10 both
for judicial and non-judicial purposes. I propose to bring down the stamp duty rate on
Mortgages from 3 to 0.5 per cent. I propose to remove the slab rates on the sale of
apartments and flats and bring in an uniform conveyance rate on all the conveyances
related to apartments and flats to 8 per cent.
I propose to levy duty on sale deeds of properties executed by house building co-operative
societies in pursuance of lease-cum-sale deeds executed before March 31, 2001 on market
value of property prevailing on the date of execution of lease-cum-sale deed of such
properties.
Motor vehicle taxes
The principal problem in the transport sector is that supply is woefully short of the
growing demand for public transport services. This mismatch has put the common citizen to
considerable difficulty and inconvenience. The inadequacy of state transport undertaking
run passenger services has resulted in several distortions including unregulated and
clandestine operation of private passenger services seriously jeopardizing the safety of
passengers and considerable dilution of traveling comfort. The brunt of this is being
borne by the rural population.
Over loaded unauthorized maxicabs causing serious accidents, substituting brazenly for
nationalized buses; goods vehicles like trucks and tractors designed for agricultural
operations taking on passenger load on routes inadequately served by the state transport
undertakings and roof top traveling is rampant.
The Tax Reforms Commission has examined this problem in considerable detail and I quote
“Inadequacy of public transport facilities due to various factors seems to be
creating conditions of artificial scarcity. Unless private operation is permitted optimum
operation of passenger services and consequent improvement in comfort and safety standards
is unlikely”. The Tax Reforms Commission has therefore made a strong case for
repeal of Contract Carriages (Acquisition) Act in the interest of the passenger comfort
and safety. Therefore, I propose to repeal the Karnataka Contract Carriages (Acquisition)
Act, 1976. This will pave the way for private contract carriages through out the state.
The Tax Reforms Commission has also recommended that stage carriage permits should also be
given to private operators within 20 kms of district headquarters. I propose to implement
this recommendation. A separate scheme for introduction of city/town services within the
radius of 20 kms in and around the district headquarters excluding Bangalore will be
implemented. Necessary amendments will be made to the various schemes notified by the
Government.
The Tax Reforms Commission has also recommended that state transport undertaking should be
brought on par with the private stage carriages and taxed in the same fashion. I propose
to enhance the present rate of tax from 6 per cent to 7 per cent on vehicles operating on
moffusil routes and 3 per cent to 5 per cent on vehicles operating on city/town limits on
the gross traffic revenue earned by state transport undertakings.
I also propose to enhance the ad-valorem rate of tax from 7 per cent to 9 per cent on new
motor cars/jeeps and omnibus/private service vehicles havi-ng floor area up to 5 sq.
meters and 10 per cent in respect of vehicles the cost of which exceeds Rs 10 lakh at the
time of registration. Necessary amendments will be made to the tax schedule.
I propose to rationalize and reduce the rate of tax on tourist vehicles from Rs 2,250 to
Rs 2,000 per seat per quarter and Rs 4,000 to Rs 3,000 per sq. meter on campers van
respectively to encourage tourist related activities in the state.
To encourage retrofitting of LPG for in-use auto-rickshaws, the Government proposes to
provide interest subsidy of Rs 2,000 per auto-rickshaw out of the Green Tax that is being
collected.
Electricity tax
There are different rates of tax applicable to different categories of consumers based on
their electricity consumption. These rates were last revised during 1996.
I propose to rationalise the existing tax structure, and introduce an ad valorem tax at 5
per cent of total electricity charges payable by all the consumers, except agricultural
consumers and Kutira Jyothi and Bhagya Jyothi consumers, as per the rates fixed by KERC
from time to time. This tax structure would replace the existing tax structure effective
from the 1st metering dates of consumers of electricity in the State on or after April 1,
2003. Necessary amendments will be made.
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